More Young Britons Are Buying Homes Despite High Prices

More Young Britons Are Buying Homes Despite High Prices

(Bloomberg) --

Sky-high property prices are not stopping more young Britons owning their own home.

After a decade of decline, the proportion of owner-occupiers age between 25 and 34 has been rising since 2014. Last year, it hit 41%, matching the share who rent from private landlords, according to government figures published this week.

House values have soared over the past two decades, nowhere more so than in London, where the average price of a home is now almost half a million pounds ($660,000). Ownership rates among young people went into sharp decline from 2004, when just one in five people rented.

Cheap borrowing costs may explain some of the recent pickup. On average across the U.K., people buying their home with a mortgage spent 18% of their household income, whereas private rent payments were 33%.

Almost 60% of private renters expect to buy a property at some point, the English Housing Survey found. However, they will need a large deposit to do so, with the average down payment for first-time buyers totaling more than 42,000 pounds last year. Over a third reported receiving help from family and friends and 45% took out loans for 30 years or longer.

The situation was as always toughest in London, where the average age of a first-time buyer climbed to a record 37, compared with 31 in the mid-2000s.

©2020 Bloomberg L.P.

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